Smith added: "He has been a terrific manager for Scotland and a great asset to the association.

"He's also been working in other aspects within the SFA, and he's a big loss."

A hint that the Blues had got their man came when caretaker assistant Eric Black quit on Tuesday to join Bruce at Wigan.

"I understand that McLeish agreed to join Birmingham soon after getting off the plane from South Africa this morning where he had been representing Scotland at the World Cup draw," said BBC 5 Live sports reporter Pat Murphy.

"Compensation isn't a problem. The SFA will receive around £1m for releasing McLeish.

The Premier League is where lots of guys want to be

SFA chief executive Gordon Smith

"McLeish has long hankered after managing a club in the Premier League and he was interviewed for the West Brom job three years ago.

"His playing credentials as a lion-hearted defender, capped 77 times by Scotland, and his clutch of trophies picked up as Rangers manager will guarantee him respect in the Birmingham dressing room."

The SFA will now hold a meeting on Wednesday to discuss who will succeed McLeish.

BBC 5 Live Scottish football correspondent Roddy Forsyth said disappointed Scotland fans should wish McLeish well on his move south of the border.

"He's the second inspirational manager to quit Scotland within 11 months," he said.

"But while the Tartan Army were able to understand Walter Smith being unable to resist the lure of Rangers second time around, they'll be more baffled by McLeish's choice of Birmingham, a club with a modest fanbase and an uncertain future.

"The fans may not thank McLeish for going, but he deserves their gratitude for what he did during those marvellous 11 months."